Key Highlights

  • GDYN shares trading up 20.49% to $11.43 after third-quarter results.
  • Third-quarter Revenue rose 9.7% to $114.3 million, above the $112 million to $114 million guidance range.
  • Non-GAAP EBITDA hit a record $22.9 million, a 20.0% Margin versus 12.2% a year earlier.
  • GAAP gross margin widened to 40.3% from 33.3% in the prior-year quarter.
  • Cash and equivalents stood at $304.3 million at September 30, 2026.

Grid Dynamics Rallies After Margin Target Is Met a Quarter Early

Grid Dynamics (NASDAQ:GDYN) is trading up 20.49% today at $11.43, after third-quarter results released on October 29, 2026 beat its own revenue guidance. Revenue rose 9.7% year over year and 5.7% sequentially to $114.3 million.

Grid Dynamics provides digital engineering and consulting services, with a growing focus on AI work for large enterprise clients. Its chief executive said the company delivered on a 300 basis point margin improvement commitment one quarter earlier than planned.

The result also topped the second-quarter report, when revenue was $108.2 million and AI work was 30.7% of sales. Sequential growth accelerated from 3.9% in the second quarter to 5.7% in the third.

Record 20.0% EBITDA Margin and Operating Turnaround

Non-GAAP EBITDA reached a record $22.9 million, or 20.0% of revenue, compared with $12.7 million and 12.2% a year earlier. GAAP gross margin was 40.3% versus 33.3%, and non-GAAP gross margin was 40.6% versus 33.8%.

The company posted Operating Income of $9.1 million, against a loss of $0.2 million in the same quarter last year. GAAP Net Income was $6.2 million, or $0.08 per diluted share, up from $1.2 million, or $0.01.

Non-GAAP net income rose to $14.7 million, or $0.18 per diluted share, from $8.2 million, or $0.09. In the second quarter, by comparison, GAAP diluted Earnings were $0.03 per share and revenue was $108.2 million.

The company had guided third-quarter non-GAAP EBITDA to a range of $16.5 million to $17.5 million, so the reported $22.9 million came in well above that range. Revenue guidance for the quarter was $112 million to $114 million.

AI Work Reaches 31% of Revenue as Client Verticals Diverge

AI-related revenue made up 31% of the quarter's total, and management said it has grown more than 45% year over year for three consecutive quarters. Its largest client vertical, media and telecom, accounted for 32.3% of revenue and grew 29.3% year over year.

Retail represented 27.2% of revenue, up 13.3% from a year ago, while finance contributed 22.5%. Consumer goods and Manufacturing made up 10.9%, and healthcare and pharma 1.8%.

Headcount fell to 4,559 from 4,971 a year earlier, which helped the margin gain. Operating Cash Flow for the first nine months was $30.5 million, close to the $30.7 million of a year ago.

Buybacks and Fourth-Quarter Guidance Frame the Next Report

Grid Dynamics repurchased 5.3 million shares for $35.5 million in the first nine months under a $50 million program, including $6.7 million for 0.9 million shares in the third quarter. Cash and equivalents were $304.3 million, down from $342.1 million at the end of 2025.

For the fourth quarter, the company guided to revenue of $113.5 million to $115.5 million and non-GAAP EBITDA of $20 million to $22 million. It did not provide full-year guidance in the release, so the fourth-quarter report will show whether the margin gains hold.

Fourth-quarter share count is guided at 81 million to 82 million basic and 82 million to 83 million diluted. Cash remained above $300 million after the repurchases.